Public perception of Islamic finance in Ethiopia: The case of Addis Baba and Oromia

This study analyzes people's awareness and perception of Islamic finance in Ethiopia and explores how these factors work together to enable financial inclusion. Islamic finance products based on Sharia principles offer interest-free, ethical, asset-based services that can potentially reach underserved segments of society. However, the potential of Islamic finance in Ethiopia has never been realized due to a lack of comprehensive understanding by the public. Therefore, this thesis aims to measure public knowledge, views and attitudes towards Islamic finance in Ethiopia and examine its potential impact in promoting financial inclusion. The data collected from 322 respondents to the survey conducted for this thesis was analyzed using Pearson correlation and t-test analysis techniques; the results show that there is a statistically significant high positive relationship between public awareness of Islamic finance and financial inclusion. In contrast, public perception was found to have a weak but significant negative effect, meaning that uncertainty and misunderstanding continue to reduce public trust and participation. Biographical data such as age, education and religion were analyzed and showed that these factors play an important role in shaping public perception and awareness. This study concludes that for Islamic finance to contribute significantly to Ethiopia's financial inclusion agenda, raising public awareness, dispelling misperceptions and creating conducive regulatory environments are key determinants. These findings have implications for policymakers, financial institutions and development stakeholders seeking to use Islamic finance as a tool for ethical, inclusive and sustainable financial empowerment.